Hyundai Heavy shutting rig construction yard due to lack of orders

South Korea’s Hyundai Heavy Industries, one of the world’s largest builders of offshore drilling rigs used by the international oil and gas industry, plans to shut down its rig construction yard due to scarce new orders.

The drop in orders has been caused by low oil prices, and lack in demand for oil field equipment, as the oil companies have slashed their capital investments, waiting for the oil price to go back up.

According to the Financial Times, Hyundai Heavy Industries will be temporarily closing its rig yard in Onsan, South Korea.

The shutdown is expected to take effect in March, and the yard will remain closed until the new orders arrive, Financial Times reported, citing the rig builder’s spokesperson.

According to the South Korean news agency Yonhap, despite being heavily affected by the oil market situations, the country’s largest shipyards, Hyundai, Samsung and Daewoo are still expected to pay bonuses to the employees.

Quoting unnamed sources, Yonhap said the shipyards are looking to boost their employees’ morale, and “are set to pay one-off bonuses to employees, amounting to 100 percent of their basic monthly salaries,“ for the Lunar New Year, falling on February 8.